Coinbase CEO Brian Armstrong recently outlined a proposal for conducting initial public offerings on blockchain, sharing his ideas via social media platform X. He argues that tokenizing shares and running IPO processes on-chain could reduce fees, speed up distribution and widen investor access compared with the traditional model. Armstrong’s proposal highlights both technological possibilities and the practical regulatory work that would be required to make on-chain IPOs viable.
Introduction to On-Chain IPOs
Armstrong describes on-chain IPOs as offerings where securities are tokenized and distributed through smart contracts instead of relying on many financial intermediaries. The concept aims to automate administrative and compliance tasks, provide real-time visibility into ownership, and allow continuous price discovery. This vision sits alongside existing experiments in tokenized securities and raises immediate questions about legal and operational feasibility.
Challenges of Traditional IPOs
Traditional IPO processes involve multiple intermediaries — underwriters, lawyers and compliance teams — which adds complexity and cost. As a result, companies typically pay substantial fees and often remain private longer, concentrating early gains with accredited and institutional investors. Armstrong pointed out that these dynamics can limit retail participation and reduce potential upside for later public investors.
Liquidity and Valuation Issues
A core problem Armstrong highlighted is the lack of continuous price discovery for private companies, which makes establishing accurate market valuations difficult. When companies finally list through a conventional IPO, pent-up selling pressure and valuation mismatches can lead to disappointing stock performance. On-chain mechanisms aim to provide more regular liquidity signals, but they would need robust market design to avoid new distortions.
Advantages of On-Chain IPOs
Blockchain-based offerings could reduce intermediaries and automate many repetitive tasks using smart contracts, which in turn lowers operational friction. Armstrong emphasized cost benefits as a primary advantage: traditional IPOs typically consume 5–7% of raised capital in fees, while blockchain-based offerings could potentially reduce this to 1–2% or lower. Additionally, tokenization promises greater transparency, global reach and more immediate visibility into ownership and trading activity.
Regulatory and Implementation Challenges
Despite technical potential, regulatory compliance remains a major barrier to on-chain IPO adoption. Offerings must align with existing securities frameworks — including pathways like Regulation D, Regulation A+ and Regulation S for cross-border sales — and satisfy KYC and AML obligations. The United States, through the SEC, maintains particularly strict requirements, which means any on-chain model must incorporate strong identity and compliance controls.
Favourable jurisdictions
Some jurisdictions have created more supportive rules for blockchain-based securities, and Armstrong noted that regions such as Switzerland, Singapore and Wyoming could serve as early testing grounds. These places may provide clearer legal frameworks for tokenized equity before broader regulatory acceptance elsewhere.
Real-World Context and Precedents
On-chain IPOs build on prior work in digital securities: Security Token Offerings (STOs) have supported compliant tokenized securities since approximately 2018, and platforms like tZERO and Securitize have already facilitated regulated tokenized equity offerings. At the same time, decentralized finance experiments with liquidity pools and automated market makers indicate possible models for continuous trading of tokenized shares.
Expert Perspectives and Industry Response
Responses to Armstrong’s proposal have been mixed: some observers point to demonstrated technical capabilities for tokenization and trading, while others stress regulatory acceptance as the main obstacle. Armstrong’s role as CEO of a public crypto exchange adds weight to his argument, since Coinbase’s experience navigating compliance informs the practical side of the proposal. For further context on Coinbase’s platform evolution, see Coinbase 2026.
Potential Impacts on Companies and Investors
If implemented, on-chain IPOs could lower costs and widen access for private companies seeking capital, enabling more firms to reach public markets earlier in their lifecycle. For investors, tokenized offerings could open earlier participation and improve transparency, though they would also introduce new risks tied to technology, regulatory uncertainty and market structure. Companies and investors would both need to adapt reporting, compliance and valuation practices for a tokenized environment.
Почему это важно
Для майнера в России, даже с 1–1000 устройствами, идея on-chain IPOs важна тем, что она меняет инфраструктуру финансовых рынков — не напрямую ваш доход от майнинга, но потенциально и косвенно. Более дешёвые и доступные способы финансирования могут увеличить число проектов и сервисов в криптоэкосистеме, что повлияет на спрос на инфраструктуру и сервисы, связанные с цифровыми активами. При этом регуляторные барьеры и требования KYC/AML останутся решающим фактором для практического внедрения.
Что делать?
Если вы майните в России, сначала оцените, как изменения в рынке цифровых активов могут затронуть ваши расходы и возможности: следите за новостями о токенизации и регуляции, чтобы понимать риски и возможности. Подготовьтесь к более широкой интеграции токенизированных активов — изучите основы цифровой идентификации и хранения токенов, а также держите резерв на случай изменений в ликвидности и волатильности. Наконец, будьте готовы адаптировать операции и налоговую отчётность в зависимости от локальных требований и возможных изменений в доступности сервисов.
Further reading
For more on Coinbase’s product ambitions and regulatory positioning related to this topic, see the article on the exchange’s drive to expand into broader services: Coinbase super‑app. These pieces provide additional background on how a major exchange’s strategy could affect market infrastructure and regulatory engagement.
FAQ
Q: What are on-chain IPOs? A: On-chain IPOs are public offerings where securities are tokenized and distributed via blockchain smart contracts instead of traditional intermediaries. This definition follows Armstrong’s description of conducting offerings on-chain.
Q: How could on-chain IPOs reduce costs? A: By automating administrative and compliance functions with smart contracts and cutting out multiple intermediary layers, blockchain-based offerings could lower fees compared with the 5–7% typical of traditional IPOs, potentially to 1–2% or lower.
Q: What are the main regulatory challenges? A: Key hurdles include meeting securities regulations (for example, pathways like Regulation D, Regulation A+ and Regulation S), complying with SEC rules in the U.S., and implementing effective KYC/AML in decentralized systems.
Q: Are there precedents for tokenized securities? A: Yes. Security Token Offerings (STOs) have supported regulated tokenized securities since approximately 2018, and platforms such as tZERO and Securitize have facilitated such offerings.
